Czech fixed-line telephone operator Cesky Telecom, 69.4-percent owned by Spanish phone giant Telefonica, said on Thursday that its general meeting had approved a merger with the mobile business Eurotel, which it already fully owns. The combined company will be renamed: Telefonica 02 Czech Republic, and is expected to take shape during the middle of the year. In March, Cesky Telecom chief executive Jaime Smith said the merger would bring an increase in income of 300 million euros with more than 60 percent of this coming from the increased revenues expected from the combined sales of fixed, mobile, and internet content. The merger comes amid increasing competition on the converging Czech telecoms market.
Czech Airlines says it carried 1.01 million passengers during the first quarter of the year, 4.3 percent more than during the same period in 2005. The state-owned airline added that the main factor for the increase was a surge in charter traffic, which rose by 57.3 percent compared with the first three months of 2005. Scheduled passenger traffic on the other hand rose year-on-year by less than half a percent in the first quarter. Unlike previous years when it markedly increased its number of flights and destinations, this year Czech Airlines will seek to boost the efficiency of its existing offer. The carrier also said it expects to make a loss of 17.5 million euros for 2005 instead of the originally predicted profit.
Czech low-cost carrier Smart Wings, a subsidiary of the main Czech charter airline Travel Servis, announced on Thursday that it would start scheduled flights from Budapest with the launch of its winter timetable. In a news release, the company said that Budapest will, after Prague, become the second base from which Travel Service will operate low-cost flights across Europe under the brand name Smart Wings. From Budapest, Smart Wings will fly seven times weekly to Paris and six times weekly to Rome, Milan and Prague. Until now the airline has operated only charter flights out of Budapest.
The Czech Prime Minister Jiri Paroubek said on Thursday he was prepared to travel to South Korea to seal an agreement for Hyundai to site its first European car plant in the Czech Republic if an escalating corruption scandal in South Korea prevented the Hyundai boss from leaving the country. Mr Paroubek said that he or Industry Minister Milan Urban were ready to fly to South Korea in May to sign the final agreement on the 1.2 billion dollars car plant. Mr Paroubek also dismissed fears that the developing corruption scandal over alleged slush fund payments by the South Korean car giant would cause the cancellation of the Czech project.
The Czech plant, expected to provide 3,000 direct and 10,000 indirect jobs, is due to start production in 2008 and become fully operational a year later, producing 300,000 cars a year.
Czech MPs agreed in a surprise move on Wednesday to lower value added tax on certain foodstuffs such as coffee, tea and chocolate but left the tax rate on alcohol unchanged. The decision by the lower house would move the selected items to a preferential, 5-percent VAT bracket, harmonising taxes on all food, while the tax rate on alcohol would remain 19 percent. The motion went through as a rider attached to an unrelated bill and presented by a deputy for the right-of-centre opposition Civic Democrats who have made lower taxes the cornerstone of their election manifesto.
The Steyr Austrian arms producer has signed contracts with the main suppliers who will participate in the production of the new Pandur armoured personnel carriers for the Czech military, Steyr head Christian Fuchs said on Thursday. Among the suppliers are the Vojenske opravarenske podniky (Czech military repair works) and the Israeli company Rafael. The Defence Ministry had expected to sign the contract on the supply of 199 carriers for almost 24 billion crowns (1 billion dollars) with the producer by the end of April, however the Antitrust Office has not yet decided on a complaint filed by the Finnish company Patria, which failed in the tender earlier this year. Moreover, the lower house defence committee wants to assess the final version of the contract, which is one of the largest orders ever for the Czech military.
The lower house has overridden a Senate veto, by passing an amendment to the cinematography fund law, rejecting all the changes proposed by the Senate. Under the bill cinemas, television channels and videocassette and DVD distributors will have to contribute to the cinematography fund supporting the Czech film industry. The Culture Ministry, which drafted the bill, says it is designed to triple the current budget of the fund, to some 222 million crowns (over 9 million dollars) a year. While filmmakers welcomed the bill when it was passed in the first vote in February, cinema and television station operators raised objections to it. If signed by the president, the bill will take effect on July 1, 2006.
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